Near-field communications is coming. Here are the pros and cons of deploying NFC in the enterprise.
The rise of near-field communications (NFC) has been part of the discussion in the mobile industry for years. Unfortunately, the technology hasn’t generated much more than discussion to this point.
So far, all who have predicted the ubiquity of the point-to-point communications technology have been wrong. Executives at major tech companies – Apple and eBay, for example – have scoffed at the idea of NFC as an everyday tool, and consumers in general still have no idea what it is.
Regardless, the technology provides ample opportunity for businesses, and is still expected to make a slow climb to relevance over the next few years. With separate factors helping to drive growth of the technology into new markets, it’s time to consider how NFC can help in the enterprise.
What is it?
At its most basic, near-field communication is a set of standards that dictate how devices communicate with each other or with NFC “tags,” which are essentially labels that can read and transmit information to and from an NFC-enabled device.
The aim of NFC standards is to establish a reliable, secure method by which devices can record and send information with minimal user input.
What can it be used for?
One of the most commonly discussed uses for NFC is mobile payment. Google Wallet, for example, stores a smartphone owner’s credit card information and uses the NFC chip embedded in such popular Android smartphones as the Samsung Galaxy S3 to allow them to make payments in retail stores. Although this application for NFC has been put down by some in the industry, it is likely to become the most common use for the technology in the next few years. Gartner predicts NFC to begin gaining traction in 2016, when the firm expects the mobile payment market to reach $617 billion and 448 million users.
However, payments are hardly the only use for near-field communications.
Quick file sharing is one example, which was made more famous in the Samsung Galaxy S3 commercials that show two users touching their smartphones together to share files. This capability could be useful for those who travel often and need to quickly exchange data with co-workers or clients. But it will be limited to those who are within arm’s reach. Otherwise, regular old email or collaboration apps still reign supreme.
NFC does provide plenty of interactive marketing opportunities. NFC tags can be placed on public advertisements or other marketing material users can scan to access additional information. The Museum of London, for example, offers NFC-focused mobile apps through which visitors can learn more information about exhibits and buy tickets for events.
Inventory has also been transformed by NFC. While RFID is better suited for managing bulk inventory due to NFC’s limited distance range of just a few centimeters, NFC holds the potential to provide deeper information on inventory. One company, American Thermal Instruments, developed an Android app that allows users to gauge and monitor temperatures of items in shipment, such as pharmaceuticals. Scanning the temperature of one object in shipment would give the approximate temperature of all objects in the shipment, and can prevent shipping-related damage to bulk shipments.
What are the benefits of NFC over other similar technology?
NFC is essentially a more targeted version of RFID technology, which has been around since the early 1980s. So, why use NFC when RFID has far longer-distance range?
The answer is quite simple: security. The NFC standard does not mandate encryption, which ensures that it’s still compatible with RFID standards, but it does support encryption. That’s why use cases for NFC and RFID differ so widely. Businesses wouldn’t use RFID to transfer financial data and classified documents, but they could do so with NFC.
[MORE NFC: NFC vs. Bluetooth and Wi-Fi]
Bluetooth also seems, at least ostensibly, like a more feasible option than NFC. Bluetooth devices can communicate over distances up to 30 feet, and Bluetooth also supports AES encryption.
In many cases, NFC is still preferable to Bluetooth. According to NearFieldCommunication.org, NFC’s restriction to a few centimeters reduces the risk of interference, which is far more common in Bluetooth data transfers when several Bluetooth-enabled devices are in the same area. Bluetooth also takes longer to configure on the devices, which makes NFC preferable for a quick file transfer. And NFC uses significantly less power than Bluetooth, which is becoming increasingly important to battery-conscious smartphone owners.
Some applications have integrated the two technologies to work in concert, launching a quick connection between two devices with NFC and then transferring that connection to Bluetooth as the devices move out of range of NFC.
What are the disadvantages?
One obvious current disadvantage is that usage among consumers remains low. Naturally, for businesses looking to establish a mobile payment system or marketing campaign based on NFC, that entails a financial risk. After incurring the startup costs of implementing an NFC system, it may take a few years before enough consumers use the technology to generate a return on that investment.
And, of course, there’s security. Even with encryption, the idea of storing all financial information in a thin, easy-to-lose smartphone is a scary one to consumers and enterprises alike. Broader improvements in mobile security will be needed before any mobile payment technology really takes off.
What is being done with it?
NFC is constantly under development. The NFC Forum, a group of more than 170 companies that includes Google, Intel and MasterCard, continues to develop new standards to help make the technology both easier to integrate in the manufacturing process and more useful to the everyday consumer.
Manufacturers that have joined the forum may soon find easier ways to embed NFC into their smartphones. One example is the integration of NFC and wireless charging technology, which will reduce the cost and time of implementing both technologies during the manufacturing process.
The NFC Forum more recently has announced partnerships to help prepare NFC into more consumer markets. Earlier this month, the International Air Transport Association, the Wi-Fi Alliance, and the Global Certification Forum all announced agreements to work with the NFC Forum to develop real-world solutions and shape the NFC standard to better meet users’ needs.
Colin Neagle covers emerging technologies and the startup scene for Network World. Follow him on Twitter https://twitter.com/#!/ntwrkwrldneagle and keep up with the Microsoft, Cisco and Open Source community blogs. Colin’s email address is cneagle@nww.com.
